Pentagon takes another stab at business reform.

• Author: Erwin, Sandra I.

The Defense Department's convoluted web of accounting systems over the years has become the proverbial Hydra whose ugly heads continue to multiply every time someone cuts one off. Many have attempted to untangle the clutter and kill the beast, with little or no success.

To take another stab at the problem, the Pentagon brought in a new team of experts headed by Paul A. Brinkley, undersecretary of defense for business transformation, who came to the Defense Department in 2004 after an extensive career in the private sector.

Under the broad label of "business transformation," the Pentagon wants to consolidate thousands of fragmented information systems that track everything from how much money it pays in contractors to the location of inventories and the status of payroll accounts.

Unless that's accomplished, officials argue, it will become increasingly difficult to account for taxpayers' defense dollars, which the Pentagon is now spending to the tune of more than $450 billion a year.

Based on his experience in private industry, Brinkley contends that many of the traditional strategies for tackling business reforms at the Pentagon have failed because they tended to focus on meeting overambitious deadlines, rather than realistically looking at the problem.

"The Defense Department generally is oriented to big goals, big targets," Brinkley says. The prevailing wishful thinking is that, "On this date, we'll throw the switch and everything is going to be good."

On the business side of things, however, this approach is not likely to work, he explains, because the task is so mind-numbingly complex, and more significantly, because the Defense Department cannot be managed as your run-of-the-mill Fortune 500 corporation.

A case in point is a decision that was made several years ago to set a 2007 deadline for a "clean audit" of the Defense Department's finances. That self-imposed goal proved to be, at the very least, impractical.

"It's better to have gradual improvements" leading up to a clean audit, rather than determine that on this specific day, "we'll get a clean audit." Even corporations don't work that way, he says. "But the culture here wants to do the big thing, declare the big victory."

The "clean audit" issue has caused some heartburn within Brinkley's office because it has opened up the Defense Department to criticism that it is not accountable for the funds it spends. Among the critics are members of Congress, the Government Accountability...